On January 29, 2016 AbbVie (NYSE: ABBV) reported financial results for the fourth quarter and full year ended Dec. 31, 2015 (Press release, AbbVie, JAN 29, 2016, View Source;p=RssLanding&cat=news&id=2133541 [SID:1234508903]).
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"AbbVie delivered strong performance in 2015, exceeding original sales, margin expansion, and earnings projections for the year," said Richard A. Gonzalez, chairman and chief executive officer, AbbVie. "We achieved significant growth in 2015, and expect to continue building on that momentum in 2016 with another year of strong performance."
Fourth-Quarter Results
Worldwide adjusted net revenues were $6.360 billion in the fourth-quarter, up 18.4 percent. On an operational basis, adjusted net revenues increased 24.4 percent, excluding a 6.0 percent unfavorable impact from foreign exchange rate fluctuations.
Global HUMIRA sales increased 16.0 percent on an operational basis, excluding the impact of foreign exchange. Exceptional U.S. HUMIRA growth of 20.7 percent was driven by continued momentum across all three major market categories – rheumatology, dermatology and gastroenterology. International HUMIRA sales growth was also strong in the fourth quarter, up 9.7 percent on an operational basis. Reported international HUMIRA sales growth in the quarter was reduced by 13.1 percent due to unfavorable foreign exchange.
Fourth-quarter global IMBRUVICA net revenue was $343 million, with U.S. sales of $295 million and international profit sharing of $48 million for the quarter.
Total company revenue growth was also driven by $554 million in global VIEKIRA sales in the quarter, as well as strong operational growth from Duodopa, Creon and Lupron.
Adjusted gross margin ratio in the fourth quarter was 80.5 percent, excluding intangible asset amortization and other specified items. On a GAAP basis, the gross margin ratio was 77.0 percent.
Adjusted selling, general and administrative (SG&A) expense was 23.9 percent of net revenues in the fourth quarter. On a GAAP basis, SG&A was 27.1 percent of net revenues.
Adjusted research and development (R&D) expense was 15.9 percent of net revenues in the quarter, reflecting funding actions in support of our mid- and late-stage pipeline. On a GAAP basis, R&D was 16.8 percent of net revenues.
Adjusted operating margin in the fourth quarter was 40.1 percent, compared to 35.8 percent in fourth-quarter 2014. On a GAAP basis, the operating margin was 33.0 percent.
Net interest expense was $199 million. The adjusted tax rate in the quarter was 21.6 percent and 21.1 percent on a GAAP basis.
Adjusted diluted earnings per share, excluding intangible asset amortization expense and other specified items, were $1.13 in the fourth quarter, up 27 percent. Diluted earnings per share were $0.92 on a GAAP basis.
Key Events from the Fourth Quarter
AbbVie submitted a supplemental New Drug Application (sNDA) for ibrutinib (IMBRUVICA) to the U.S. Food and Drug Administration (FDA) for use in treatment-naïve chronic lymphocytic leukemia (CLL) patients, based on results from the Phase 3 RESONATE-2 study. These data, published in The New England Journal of Medicine (NEJM), found that IMBRUVICA significantly decreased the risk of progression or death (progression-free survival, PFS) and significantly decreased the risk of death (overall survival, OS) versus chlorambucil in treatment-naïve patients 65 years and older with CLL.
AbbVie submitted a New Drug Application (NDA) and a Marketing Authorization Application (MAA) for venetoclax in patients with relapsed/refractory (R/R) CLL in patients with chromosome 17p deletion to the FDA and European Medicines Agency (EMA), respectively. Priority review status was granted by the FDA and validation provided by the EMA for these submissions based on results from a Phase 2, open-label trial that found treatment with venetoclax demonstrated a 79.4 percent overall response rate (ORR) as monotherapy treatment, including patients that achieved complete remission.
AbbVie has now received three FDA Breakthrough Therapy Designations for venetoclax. The first designation was received early last year for the treatment of patients with R/R CLL with chromosome 17p deletion. The second designation for venetoclax was received earlier this month for combination therapy with rituximab for patients with R/R CLL, including those with chromosome 17p deletion. A third designation was received this week for venetoclax in combination with hypomethylating agents (HMAs) in patients with untreated (treatment-naïve) acute myeloid leukemia (AML) who are ineligible to receive standard induction therapy (high-dose chemotherapy).
AbbVie submitted a sNDA to the FDA for labeling considerations based on safety and efficacy results from the Phase 3 HELIOS trial of IMBRUVICA in patients with R/R CLL. The trial found that treatment with IMBRUVICA plus bendamustine and rituximab, versus placebo plus rituximab, significantly reduced the risk of disease progression or death by 80 percent and significantly improved ORR compared to placebo plus rituximab in previously-treated CLL/SLL patients.
The FDA accepted AbbVie’s sNDA and granted priority review for VIEKIRA PAK without ribavirin in patients with genotype 1b (GT1b) chronic hepatitis C virus infection (HCV) and compensated cirrhosis (Child-Pugh A). The application was supported by data from the TURQUOISE-III study, which showed 100 percent sustained virologic response at 12 weeks post-treatment (SVR12) in this patient population.
AbbVie announced that the FDA accepted its NDA for a once-daily, fixed-dosed formulation of VIEKIRA PAK to treat GT1 HCV. The proposed dosing for the fixed-dose formulation is three oral tablets, taken once daily with a meal, with or without ribavirin. AbbVie anticipates regulatory action on the new formulation in 2016.
At the American Society of Hematology (ASH) (Free ASH Whitepaper)’s Annual Meeting (ASH) (Free ASH Whitepaper) in December 2015, AbbVie presented new results from a Phase 2, open-label study of venetoclax in treatment-naïve patients 65 years and older with AML who were not eligible for intensive-induction chemotherapy. These data found that combination treatment with venetoclax and hypomethylating agents resulted in complete response rates of approximately 71 percent, which is roughly double the response rate that would be expected with current standard of care treatment. AbbVie plans to initiate registration studies of venetoclax for this indication in 2016.
AbbVie’s IMBRUVICA partner Janssen presented results from the Phase 3 RAY study which demonstrated treatment with IMBRUVICA significantly prolonged PFS and improved ORR in patients with R/R mantle-cell lymphoma (MCL), compared with temsirolimus. Specifically, IMBRUVICA was found to reduce the risk of disease progression or death by 57 percent with a median follow-up of 20 months. These data were also published online in The Lancet.
AbbVie announced that data from a Phase 2 study evaluating IMBRUVICA therapy in treatment-naïve patients with follicular lymphoma (FL) demonstrated that a combination of IMBRUVICA and rituximab was well-tolerated and associated with ORR of 82 percent.
AbbVie presented data from its next-generation HCV regimen (ABT-493 and ABT-530) being evaluated as a pan-genotypic, once-daily treatment option for patients with HCV at the 2015 Annual Meeting of the American Association for the Study of Liver Diseases (AASLD). Results demonstrated 12 weeks of treatment resulted in 97-100 percent SVR12 in GT1 non-cirrhotic HCV, 96-100 percent in genotype (GT2) and 83-94 percent in genotype 3 (GT3) patients. Additionally, data from the SURVEYOR-I study were also presented at the meeting and showed that non-cirrhotic GT1 HCV patients who received shorter duration of treatment for 8 weeks with ABT-493 and ABT-530 achieved SVR12 rates of 97 percent. The company initiated Phase 3 studies in the fourth quarter of 2015.
At the American College of Rheumatology (ACR) Annual Meeting, AbbVie presented the full 12-week, Phase 2b safety data for ABT-494, an investigational oral JAK-1 inhibitor, from the BALANCE-I study (efficacy data was previously top-lined). This study evaluated a broad dose range to understand the boundaries of JAK-1 selectivity and the efficacy of ABT-494 versus placebo in previously treated patients with rheumatoid arthritis (RA) with persistent and active disease. The study met its primary endpoint, achieving an ACR20 response after 12 weeks of treatment using an LOCF approach, and ACR20 for all dose levels. The BALANCE I and II results support the company’s decision to move ABT-494 into Phase 3 studies with a once-daily dose. The Phase 3 program was initiated in late 2015 and a Phase 2 trial of ABT-494 is ongoing for the treatment of Crohn’s disease.
The FDA approved Empliciti (elotuzumab) for the treatment of multiple myeloma (MM) as a combination therapy in patients who have received one to three prior therapies. Empliciti was co-developed by AbbVie and Bristol-Myers Squibb (BMS) and will be marketed by BMS. This approval was based on data from a Phase 3 study which demonstrated that patients treated with Empliciti plus standard of care therapy achieved a 30 percent reduction in the risk of disease progression or death compared to standard of care alone. This is the first FDA approval for an immune-stimulatory antibody for MM in this indication.
Confirming Full-Year 2016 Outlook
AbbVie is confirming its diluted earnings-per-share guidance of $4.90 to $5.10 on an adjusted basis for the full-year 2016, representing strong double-digit growth versus 2015 and positioning AbbVie to be among the industry leaders for growth again in 2016. The company’s 2016 adjusted diluted earnings-per-share guidance excludes $0.45 per share of intangible asset amortization expense and other specified items. Including these items, AbbVie’s diluted earnings-per-share guidance is $4.45 to $4.65 on a GAAP basis.